With lower Social Security replacement rates, vanish- ing traditional pensions, and longer lifespans, many people will need to work longer to ensure a secure retirement. Working longer directly increases current income; it avoids the actuarial reduction in Social Security benefits; it allows people to contribute more to their 401(k) plans; and it shortens the period of retirement. The good news is that people have begun to respond; the average retirement age has increased by about two years over the last 25 years.
The brief’s key findings are:
- Over the past 25 years, the average retirement age for U.S. workers has been rising, a trend that should align with when people first claim Social Security.But the percentage of all initial claimants who are age 62 shows little change until recently.
- A better metric to capture claiming behavior over time – when the population is aging – is the percentage of workers turning age 62 who claim at 62.
- This measure, based on unpublished Social Security data, shows a steep decline in claiming at 62 since the mid-1990s: from 56 percent to 36 percent for men.
- In short, while more than a third of workers still claim right away, a growing number are waiting until their mid-60s or later.
Chosen excerpts by Job Market Monitor. Read the whole story at Trends in Social Security Claiming | Center for Retirement Research.